If the Personal Saving Rate Is 5% and Personal Saving

question 22

Multiple Choice

If the personal saving rate is 5% and personal saving is $10 billion, the value of personal disposable income

• A) is $100 billion.
• B) is $200 billion.
• C) is $500 billion.
• D) cannot be determined from this information.

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Definitions:

Budget

An estimation of revenue and expenses over a specified future period of time, often used as a plan for management of money.

Convex Set

In mathematics, a set where, for every pair of points within the set, every point on the line segment between them is also within the set.

Interest Rate

The cost of borrowing funds, typically expressed as a percentage of the total amount loaned, which accrues over time.

WARP

stands for Weak Axiom of Revealed Preference, a principle in consumer theory that states if a consumer prefers bundle A to bundle B when both are affordable, then the consumer will not choose B when A is affordable.